How can finance and IT agree on the right cloud strategy?
The hype associated with cloud computing is still stubbornly lingering, due in part to a lack of clarity of precisely what cloud is and pervasive marketing initiatives by vendors and related parties, where the "cloud" moniker has been liberally applied.
Unfortunately, other than the purely technical definition of cloud, there is still a diversity of opinion as to precisely what cloud is. If your organization uses a "pay-as-you-go" type of IT service, is that "cloud," or just a shared hosting arrangement with cloud-like pricing? If your organization has implemented Dropbox or Gmail or hosted a few of your virtual machine images in a cloud data center, have you really moved to "the cloud"?
Whether your organization's information technologies are internally managed, externally hosted and managed, in the public cloud, or any hybrid mix thereof is beside the point. What is crucial is that the use of any particular technology or technology delivery model is tied to demonstrable business need with known cost, known risk and known value. Additionally, that cost, risk and value needs to be visible over the life expectancy of the technology or project -- not just in the short term.
To this end, it is important that both finance and IT agree on the appropriate definition of "cloud" in the context of their own business and disseminate that definition across the organization. Analysis and the ability to forecast cost are two core competencies of finance professionals. This expertise, combined with IT's capabilities of mapping the time, effort and hidden costs for integration and other ancillary activities in support of any cloud implementation will help ensure that the business case for cloud is appropriately validated.
Organizations that are serious about optimally exploiting the capabilities of technology should have a well-articulated enterprise IT business strategy, a component of which encapsulates the cloud strategy. In essence, a cloud strategy that is orphaned from the business's and IT's overarching strategies is more likely to be a liability, as are any carte blanche statements about a 'cloud first' strategy based on opinion rather than context-specific evidence.
In the absence of a clearly articulated, well-considered cloud policy, shadow IT will flourish, which has the potential to introduce a number of business risks.
Cloud strategy? What cloud strategy?
In and of itself a cloud strategy means little, unless it is fully integrated with deliberate business and organizational initiatives.
In summary, both finance and IT need to collaborate to ensure that the organization as a whole understands that if there is a coherent …
- Enterprise business strategy, supported by coherent …
- Enterprise business plans, of which a key component is the …
- IT business plan, (not just budget) of which a key component may be …
- A technology and solutions strategy, of which a key component may be …
- A cloud strategy, roadmap or initiative
… you probably will arrive at your destination of having the appropriate technology choice, be that cloud or otherwise.
By following this process, you will eliminate, or at least minimize, the risks associated with poorly defined or orphaned technology projects that were supported by an ill-defined or fractured cloud strategy.
About the author:
Rob Livingstone is a former CIO with more than three decades of experience in the corporate world. In addition to running his IT advisory practice, he is an author and commentator, providing authoritative, independent insights on a range of IT topics including emerging technologies, governance and IT security. Rob is the author of the book Navigating through the Cloud and is also a fellow at the University of Technology, Sydney, Australia, where he teaches leadership, strategy and innovation in the school's flagship MBITM program. Visit Rob at www.rob-livingstone.com or email him at firstname.lastname@example.org.
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